The Performance of Simplicity

Pascal Böni () and Tim Kröncke ()
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Pascal Böni: Tilburg School of Economics and Management & TIAS
Tim Kröncke: FHNW University of Applied Sciences and Arts Northwestern Switzerland

Chapter Chapter 2 in The Evidence-Based Investor, 2025, pp 9-12 from Springer

Abstract: Abstract We take a look at the performance of a scientifically reasonable but very simple 50/50 buy-and-hold investment strategy that stays clear of investing myths. To this end, the historical long-term performance of a portfolio that invests 50% in global equities and 50% in government bonds is reviewed. Even though this 50/50-portfolio does not include any complex trading and investment strategy, it lead to an impressive performance: CHF 10,000 invested in 1970 would have grown to a staggering value of CHF 170,600 by the end of 2023. While there is no guarantee that such a performance will be repeated over the next 50 years, we argue that investment myths are likely to be a significant drag on long-term performance that can be avoided.

Keywords: Historical performance; Market portfolio; Long-term performance; Investment myths (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-88675-1_2

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DOI: 10.1007/978-3-031-88675-1_2

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